New legislation to tackle late payments is currently going through parliament.
Key provisions of the Bill
The Bill will introduce a new 60-day cap on payment terms for larger firms paying smaller suppliers, alongside new mandatory interest on late payments, with a requirement for all commercial contracts to include statutory interest set at 8% above the Bank of England base rate.
Additional measures include a time limit for raising disputes on payments and action to ban the practice of withholding retention payments under construction contracts, to prevent small firms losing retentions to insolvency or non-payment.
The legislation also grants significant new powers for the Small Business Commissioner to investigate poor payment practices, adjudicate disputes outside the courts, and fine the worst offenders. Provisions are intended to apply UK-wide, though this will require regulatory alignment in Scotland, Wales and Northern Ireland.
Payment issues are always disruptive, and we can advise on cash and debtor management if this is relevant to you. Please don’t hesitate to contact us for an in-depth discussion.
